Former Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono has backed John Mangudya in the fight against illicit financial flows saying his successor was “acting wisely”.
BY BUSINESS REPORTER
Last week, Mangudya introduced a raft of measures to plug leakages amid revelations that nearly $2 billion was spirited out of the country by individuals and corporates.
The measures entail suspension of the free funds concept, putting restrictions on offshore investments and withdrawals above $10 000 now required at least one-day notice to the bank.
“The current governor is focused and doing a good job of his mandate and is influenced in his actions by what he sees as his headaches at any particular point in time, and from the recent monetary policy statement, externalisation seems to be one such headache against which he is acting wisely,” Gono said yesterday.
Mangudya last week said that $864 million was externalised in 2015 by individuals under the auspices of free funds for various dubious and unwarranted purposes that included remittance of donations to oneself, offshore investments and externalisation of export sales proceeds by corporates through individual accounts leading to pervasive tax evasion and externalisation.
He said $1,2 billion was externalised by companies in the form of export proceeds, high management and expert fees.
“We are exporting liquidity. We need to put a stop to this behaviour.
There is need for a fundamental shift to protect the integrity of the multicurrency system,” he said.
During his tenure at the apex bank, Gono complained of externalisation by individuals and corporates, but got the flak from critics who accused him of trying to settle personal scores.
But yesterday, Gono played down suggestions that he has been vindicated, adding that “each governor deals with challenges that confront him or her at that particular time in his/her discharge of a given mandate”.
He said some challenges have over the years assumed “a permanency of existence that transcend the inter-generational presence of different governors the world over” since the terrorist bombing of the Twin Towers in US in 2001.
“Just like ‘climate change’ issues have nothing to do with who is the minister of environment or agriculture in a particular year in any given country today, the need to curb illicit financial flows, money laundering and terrorist financing in the world of finance is a permanent agenda for any governor, so, there is nothing to vindicate or not about my actions when I was governor relative to now,” Gono said, adding that he was focused on the turnaround of the fortunes of his chicken business.
He said the business has been caught up “in the prevailing difficulties of high borrowings, high interest rates, liquidity challenges and high imports of chickens, eggs and other agricultural products”.
Gono said the challenges have also conspired to place “considerable difficulties” in his “vision of wanting to be the largest chicken producer and a chicken billionaire in Zimbabwe and the region by December 2020”.
His company Lunar Chickens had assets auctioned over debts.
“Things are tough but make no mistake, everything can be auctioned today but my brains cannot. As long as I have them, the sky is the limit. Let’s talk next year around the same time.”